Generating alpha returns in energy infrastructure

Actis invests globally in critical, sustainable infrastructure, not only because we view it as our mission to transform infrastructure for a better tomorrow but, above all, because we know that our investment approach, and experience investing in critical infrastructure in more than 35 countries over the last 20 years, delivers competitive, alpha returns. 

There are many reasons for this, including that infrastructure is one of the fastest growing sectors in private markets, but also because Actis specifically invests behind three global megatrends spurring the global economy: decarbonisation and the energy transition, digitalisation, and deglobalisation and supply chain re-allocation. 

Not all parts of the world will benefit equally from these transformative megatrends but in the growth markets where Actis invests, notably in Latin America, Asia, the Middle East and Africa, these trends are accentuated. This is perhaps most notably the case for the energy transition, which represents both a challenge as well as an enormous investment opportunity. The growth markets Actis focuses on represent about 80 per cent of the global population but only get about a third of the world’s infrastructure investments, with two-thirds typically allocated to North America and Western Europe. 

While this is a stark market inefficiency, it means Actis faces less competition for its investments, allowing the firm to pick and choose the best investments with the strongest risk-return ratios. This is precisely what Actis has been doing for 20 years, most notably in the energy sector, where the firm has built and invested in 28 energy generation businesses and invested in 5 transmission and distribution businesses.

You can now read the full thought leadership at the link below

Supporting documents

Click link to download and view these files